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Who Actually Owns
the William Beaver House?
15 William Street hit the market in 2007, just before the crash. Foreign buyers took advantage, and it remains an attractive asset for global wealth. Of the 170 recorded sales between November 2008 and January of this year 9 listed a foreign address, and 87 were purchased through anonymous entities or listed only a lawyer’s contact information.

(Photo: Illustration by Remie Geoffroi)

Daniela Sassoun, a Portuguese-speaking Corcoran broker who used to work in Swiss banking, frequently travels to São Paulo and Geneva to sell elite buyers on New York. “We give them the state of the market, and the lawyers explain how to purchase this under an LLC or a trust,” Sassoun says. “It’s wealth advisory: Here is an option for you to diversify your $100 million.”

Foreign direct investment in U.S. real estate amounted to $50 billion in 2012, according to the Congressional Research Service. The national firm RealtyTrac reports a recent rise in all-cash sales (a rough indicator of such investor activity) in the metropolitan areas of Florida and New York City, where well over half of all transactions in the first quarter were handled without financing. “Those are the coastal trophy markets for foreign buyers,” says Daren Blomquist of RealtyTrac. South American buyers are a particular force in Miami, where they are credited with reviving the city’s condo market after the ruinous real-estate crash.

No American city rivals New York, however, in the diversity of its wealthy population and the buying options it offers. As expensive as New York’s luxury real estate might seem, it’s a bargain compared to other global capitals; a million dollars will buy twice as much space here as it does in Monaco or Hong Kong. New York is perceived to be more stable than Miami, Shanghai, and Beijing. It is much cheaper than London, where tabloid-fanned outrage over property prices has created an uncomfortable political climate and various new or proposed taxes are aimed at foreign investors and offshore entities. In New York, by contrast, buyers of new construction often qualify for a tax abatement. At One57, currently the city’s most expensive new address, the tax break amounts to around 94 percent. A Times analysis estimated that its priciest penthouse, which is reportedly in contract for more than $90 million, would initially be billed less than $1,500 a month.

A luxury-skyscraper boom, fueled by international buying power, is casting a shadow over Central Park, where new and proposed towers are attempting to mimic the example of One57, which boasts of sales to every continent but Antarctica. At 432 Park Avenue, construction on a Rafael Viñoly–designed tower has ticked past 1,000 feet, and three more similarly scaled developments are on the way. Also, farther south, there’s a controversial tower by Jean Nouvel going up next to MoMA. Across the street is the Baccarat, affiliated with the crystal brand, which has been heavily marketed to foreign buyers. Up at 520 Park Avenue, Robert A.M. Stern is designing a building where prices will start at $27 million and run up to well over $100 million.

Much of this speculation is being driven by two factors: sparse supply, due to the absorption of the inventory left over from the last boom, and fast-rising prices. Manhattan saw a 30 percent price increase over the past year, on average, which market analyst Jonathan Miller attributes primarily to sales closing in ultraluxury buildings. The highest end of the market has seen stunning inflation. A decade ago, the Mexican financier David Martinez shattered a record when he bought a penthouse at the Time Warner Center for $42.5 million, or around $3,500 a square foot. “It was a huge number,” says Richard Wallgren, who was the sales director at the building. Wallgren is currently leading sales at 432 Park Avenue, which is being developed by Harry Macklowe and the CIM Group. Its most expensive penthouse has an asking price of $95 million—which works out to $11,000 a square foot.

432 Park Avenue and its competitors have historical antecedents, most notably Olympic Tower, built in the 1970s with financing by Aristotle Onassis. But the market really began to emerge a decade ago with 15 Central Park West, where Wallgren also handled sales. The development was initially marketed to local finance types, like Daniel Loeb and Sandy Weill, but it quickly attracted buyers from Israel, China, India, and elsewhere.

Many of these buyers took meticulous steps to conceal their identities. Some employed misdirection. The owner of a $37 million unit, Novgorod LLC, was widely believed to be a Russian oligarch until it was revealed to represent the chief executive of the British bank Barclays. (He later resigned in a financial scandal, but the LLC still owns the apartment.) Weill’s penthouse apartment was resold for $88 million in 2011 to an LLC owned by a trust in the name of Dmitry Rybolovlev’s daughter. During divorce proceedings, his wife filed a lawsuit claiming that the trust was a “sham entity” created to conceal the oligarch’s wealth.

Other investors in 15 Central Park West relied on the strict secrecy laws in offshore jurisdictions. Two units, for instance, were sold to Jolly Star Holding Limited, an entity registered in the British Virgin Islands, which guards the identity of shareholders. But confidential records obtained by the ICIJ as a part of a massive leak identify Jolly Star’s owners as Sun Min and Peter Mok Fung, a Chinese couple in the shipping business. A Hong Kong tribunal recently convicted Sun Min of trading on inside information related to Coca-Cola’s failed acquisition of a Chinese juice company in 2008, the same year she and her husband made their $15 million purchase.